In the process of managing and resolving VAT refunds for export cases, the Dong Nai Tax Department has encountered challenges regarding VAT policy on goods transferred from domestic areas to bonded warehouses.
1. Policies and Regulations on On-spot Export-Import Activities:
According to Clause 1, Article 35 of Decree No. 08/2015/ND-CP dated January 21, 2015, issued by the Government, providing detailed provisions and implementation measures for the Customs Law on customs procedures, inspection, supervision, and control:
“Article 35. Customs procedures for goods exported or imported on the spot
- Goods exported or imported on the spot include:
a) Goods processed in Vietnam and sold by foreign organizations or individuals that placed the processing orders to organizations or individuals in Vietnam.
b) Goods traded between domestic enterprises and export processing enterprises, or enterprises in non-tariff zones.
c) Goods traded between Vietnamese enterprises and foreign organizations or individuals without a physical presence in Vietnam, as instructed by foreign merchants to deliver or receive goods with other enterprises in Vietnam.”
Additionally, according to Clause 1, Article 85 of Decree No. 08/2015/ND-CP:
“Article 85. Goods sent to bonded warehouses
1.Goods from Vietnam that have completed export customs procedures, goods from abroad awaiting import procedures into Vietnam, or goods awaiting export to third countries by entities permitted to lease bonded warehouses as stipulated in Clause 1, Article 84 of this Decree may be stored in bonded warehouses.”
2. Information Exchange with the Dong Nai Customs Department:
On September 11, 2024, the Dong Nai Tax Department issued Official Letter No. 7905/CTDON-KKKTT requesting coordination with the Dong Nai Customs Department regarding customs procedures.
On September 25, 2024, the Tax Department received a response via Official Letter No. 1629/HQĐNa-GSQL from the Dong Nai Customs Department, including the following points:
2.1 Regulations on Export-Import Activities:
“…Based on the above regulations, bonded warehouses qualify as separate customs zones under Clause 4, Article 3 of the Foreign Trade Management Law No. 05/2017/QH14. The trading and exchange of goods between bonded warehouses and external entities are considered export-import activities.”
2.3 Tax Policy for Goods Transferred from Domestic Areas to Bonded Warehouses and Goods Exiting Bonded Warehouses for Domestic Import:
Tax policies for goods transferred from domestic areas to bonded warehouses and goods exiting bonded warehouses for domestic import are implemented according to the regulations in effect at the time of customs declaration registration.”
3. Arising Issues:
Based on the above regulations, is the transfer of goods sold to foreign merchants with a physical presence in Vietnam and designated for delivery to third-party enterprises in Vietnam via bonded warehouses considered an export activity eligible for the 0% VAT rate?
- Viewpoint 1: Goods sold to foreign merchants with a physical presence in Vietnam and designated for delivery to third-party enterprises in Vietnam via bonded warehouses are not considered export goods and are not eligible for the 0% VAT rate, as stipulated in Clause 1, Article 9 of Circular No. 219/2013/TT-BTC dated December 31, 2013, issued by the Ministry of Finance.
- Viewpoint 2: Goods sold to foreign merchants with a physical presence in Vietnam and designated for delivery to third-party enterprises in Vietnam via bonded warehouses are considered export goods and are eligible for the 0% VAT rate, as stipulated in Clause 1, Article 9 of Circular No. 219/2013/TT-BTC dated December 31, 2013.
4. Opinion of the Dong Nai Tax Department:
The Dong Nai Tax Department proposes handling the issue according to Viewpoint 1, stating that the goods in question are not considered export goods and are not eligible for the 0% VAT rate.
Reasoning: The case does not meet the conditions for on-the-spot export stipulated in Point c, Clause 1, Article 35 of Decree No. 08/2015/ND-CP because the foreign merchant has a physical presence in Vietnam. Additionally, the goods in this case do not qualify as export goods since the function of bonded warehouses is limited to storing “goods from Vietnam that have completed export customs procedures, goods from abroad awaiting import procedures into Vietnam, or goods awaiting export to third countries.”
The above outlines the issues encountered by the Dong Nai Tax Department. To ensure compliance with VAT refund procedures, the Tax Department reports and requests the General Department of Taxation to provide guidance on this matter.
(Based on Official Letter No. 8958/CTDON-KKKTT dated October 10, 2024)
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